SOURCE: India Globalization Capital, Inc.

India Globalization Capital, Inc.

November 22, 2010 08:45 ET

India Globalization Capital Announces Fiscal Second Quarter Results

BETHESDA, MD--(Marketwire - November 22, 2010) - India Globalization Capital, Inc (NYSE Amex: IGC), a company competing in the rapidly growing materials and infrastructure industry in India, announced financial results for its fiscal second quarter ended September 30, 2010.

Total Revenue was $1.68M for the three months ended September 30, 2010, as compared to $5.36M for the three months ended September 30, 2009 and $1.12 million for the three months ended June 30, 2010. The revenue reported this quarter does not include revenue from one of our subsidiaries (Sricon), which was deconsolidated in 2010. Sricon revenue is included in the 2009 period and is therefore significantly higher. However, when adjusting revenues by eliminating Sricon's revenue in order to make these comparable, the Company remained flat on the top line for the three months ended September 30, 2010 as compared to September 30, 2009 and about 30% higher when compared to the previous quarter ended June 2010.

Ram Mukunda, CEO of India Globalization Capital, said, "We are seeing strong demand for both aggregate and iron ore with over $200M in orders over the next five years. However, we remain hampered in servicing most of these contracts by the continued closure of ports in western India. The Indian Government closed mines and ports in the west coast of India starting in July 2010, in an attempt to crack down on illegal mining. The closure coincided with the monsoons in India. The general expectation is that the issue will be resolved and the ports will reopen no later than January. While the lack of access has created a great deal of stress on the industry and on IGC, to the extent that it is successful in curbing illegal mining and illegal export, it is very positive."

Mukunda continued, "While we have a limited capability to ship from the east coast, most of our supply chain and processes are on the west coast of India from where we primarily service our Chinese customers. Still, we have continued to build our business over this past quarter and still maintain a large customer base and have expanded our expertise and processes. We expect to start supplying ore in significantly larger quantities and at higher margins once the ports reopen."

Cost of revenue for the three months ended September 30, 2010 was $1.61M. The cost of revenue continues to be high because the Company has contracts for rock aggregate and iron ore being filled prior to our processes being fully operational. This practice will continue until our supply processes are fully functional. At that point, we can start filling orders from a much-improved cost basis. In the meantime our strategy is to gain market share, establish our brand, and expand the customer base.

Consolidated net income loss for the three months ended September 30, 2010 was $859 thousand compared to a consolidated net loss of $592 thousand for the same period in 2009. This quarter the charges related to debt amortization and non-cash interest were about $.37 Million. The loss per basic share for the quarter was ($.06) per share, compared to ($.06) per share for the September quarter ended 2009.

As of September 30, 2010 the Company had $2.24M of cash and cash equivalents including restricted cash.

Mr. Mukunda concluded, "We have a great opportunity ahead of us. We have been constrained in the past couple of quarters but have not stopped building the infrastructure for a very successful business model that leverages the economic engines of both India and now China. We believe that with additional capital we can go a long way in the coming year to unlock value in the near future by enabling us to better capitalize on the opportunity before us."

                        CONSOLIDATED BALANCE SHEETS

                                                          As of
                                                September 30,   March 31,
                                                    2010          2010
                                                 (unaudited)    (audited)
                                                ------------  ------------

Current assets:
Cash and cash equivalents                       $    388,178  $    842,923
Accounts receivable, net of allowances             6,010,848     4,783,327
Inventories                                          213,212       162,418
Advance taxes                                         41,452       119,834
Deferred income taxes                                      -        25,345
Dues from related parties                          3,142,280     3,114,572
Prepaid expenses and other current assets          1,633,481     2,054,462
  Total current assets                          $ 11,429,451  $ 11,102,881
Goodwill                                           6,200,518     6,146,720
Property, plant and equipment, net                 1,561,521     1,748,436
Investments in affiliates                          8,443,181     8,443,181
Investments-others                                   993,062       810,890
Deferred income taxes                              4,557,036     4,075,461
Restricted cash                                    1,850,701     2,169,939
Other non-current assets                           1,795,647       872,184
  Total assets                                  $ 36,831,117  $ 35,369,692

Current liabilities:
Short-term borrowings                           $  1,000,651  $  1,389,041
Trade payables                                     3,439,078     1,839,405
Accrued expenses                                     417,253       461,259
Notes payable                                      4,120,000     4,120,000
Dues to related parties                                    -       149,087
Other current liabilities                            473,946       149,942
  Total current liabilities                     $  9,450,928  $  8,108,734
Other non-current liabilities                      1,124,694     1,107,498
  Total liabilities                             $ 10,575,622  $  9,216,232

Stockholders' equity:
  Common stock -- $.0001 par value; 75,000,000
   shares authorized; 13,653,207 issued and
   outstanding as of September 30, 2010 and
   12,989,207  issued and outstanding as of
   March 31, 2010                               $      1,366  $      1,300
Additional paid-in capital                        38,249,809    36,805,724
Accumulated other comprehensive income            (2,482,690)   (2,578,405)
Retained earnings (Deficit)                      (10,899,434)   (9,452,000)
  Total stockholders' equity                    $ 24,869,051  $ 24,776,619
    Non-controlling interest                    $  1,386,448  $  1,376,841
  Total liabilities and stockholders' equity    $ 36,831,117  $ 35,369,692
                                                ============  ============

          The accompanying notes should be read in
          connection with the financial statements.


                        Three months ended           Six months ended
                             Sept 30,                    Sept 30,
                    --------------------------  --------------------------
                        2010          2009          2010          2009
                    ------------  ------------  ------------  ------------

    Revenues        $  1,681,586  $  5,362,138  $  2,809,997  $  8,085,480
    Cost of revenues  (1,612,753)   (4,710,718)   (2,596,133)   (6,503,046)
  Gross profit            68,833       651,420       213,864     1,582,434
    Selling, general
     and administrative
     expenses           (763,713)     (665,720)   (1,344,609)   (1,396,535)
    Depreciation        (100,930)     (209,479)     (197,374)     (417,822)
  Operating income
   (loss)               (795,810)     (223,779)   (1,328,119)     (231,923)
    Interest expense    (197,611)     (355,586)     (410,709)     (767,068)
    Amortization of
     debt discount      (176,526)            -      (356,436)            -
    Interest income       66,894        38,994       129,781       105,593
    Other income, net    210,939             -        60,472             -
Income before
 income taxes and
 minority interest
 attributable to
 interest               (892,114)     (540,371)   (1,905,011)     (893,398)
    Income taxes
     benefit/ (expense)   33,331       (51,350)      455,014      (157,766)
  Net income/(loss)     (858,783)     (591,721)   (1,449,997)   (1,051,164)
     interests in
     earnings of
     subsidiaries          2,523        11,529         2,563       (65,025)
  Net income / (loss)
   attributable to
   stockholders     $   (856,260) $   (580,192) $ (1,447,434) $ (1,116,189)
  Earnings per share
   attributable to
   common stockholders:
    Basic and
     Diluted        $      (0.06) $      (0.06) $      (0.11) $      (0.11)
   number of shares
   used in computing
   earnings per share
    Basic and diluted 13,427,020    10,242,749    13,343,949    10,166,960

          The accompanying notes should be read in
          connection with the financial statements.

About IGC

Based in Bethesda, Maryland, India Globalization Capital (IGC) is a materials and construction company operating in India. We supply iron ore to China and rock aggregate to the infrastructure industry in India. For more information about IGC, please visit the company's web site at

Forward-Looking Statements:

Some of the statements contained in this press release that are not historical facts constitute forward-looking statements under the federal securities laws. Forward-looking statements can be identified by the use of the words "may," "will," "should," "could," "expects," "plans," "anticipates," "believes," "estimates," "predicts," "intends," "potential," "proposed," or "continue" or the negative of those terms. These statements reflect management's current views and are subject to risks and uncertainties that could cause actual results to differ materially from those projected, expressed or implied in these statements. Factors that could cause actual results to differ, relate to: (i) ability of the parties to successfully execute on contracts and business plans, (ii) ability to raise capital and the structure of such capital including the exercise of warrants, (iii) exchange rate changes between the U.S. dollar and the Indian rupee, (iv) weather conditions in India and (v) the ability of the Company to access ports on the west coast of India. Readers are cautioned not to place undue reliance on these forward-looking statements. The Company undertakes no obligation to publicly update any forward-looking statements, whether as a result of new information, future events, or otherwise. Other factors and risks that could cause or contribute to actual results differing materially from such forward looking statements have been discussed in greater detail in the Company's Annual Report on Form 10-K for the year ended March 31, 2010 filed with the Securities and Exchange Commission.

Contact Information

  • Investor Relations Contact:

    Mr. John Selvaraj